September Rate Cut Now Imminent After Shock Inflation Data as Bitcoin Eyes 150K

Core Insights - U.S. wholesale inflation unexpectedly declined in August, with the Producer Price Index (PPI) for final demand slipping 0.1%, marking the first monthly drop in four months [1][2] - The annual PPI rose 2.6%, significantly below the expected 3.3% and down from July's 3.1% [2] - Core PPI, excluding food, energy, and trade services, increased by 2.8% year-on-year, also below the expected 3.5% [2] Inflation and Economic Indicators - The decline in PPI was primarily driven by a 0.2% fall in services prices, the steepest drop since April, while goods prices saw a slight increase of 0.1% [3] - The weaker inflation data has heightened market expectations for a Federal Reserve interest rate cut, with futures markets fully pricing in a quarter-point cut and speculation for a potential 50-basis-point reduction [3] Labor Market Conditions - The labor market is showing signs of strain, with government revisions indicating that the economy created 911,000 fewer jobs in the year through March than previously reported [4] - The August jobs report indicated that employment growth has nearly stalled, with job losses recorded in June for the first time in over four years [5] Market Reactions - Financial markets reacted swiftly to the inflation data, with Bitcoin surging past the $113,000 mark, reflecting traders' expectations of looser monetary policy [5][6] - Bitcoin is currently trading around $113,913, marking a 2.37% increase over 24 hours and a 2.4% gain in the past two weeks, with forecasts suggesting potential movement toward the $150,000 level if rate cuts accelerate [6][7]